CORPORATE GOVERNANCE IN THE SETTING UP AND OPERATION THE AUDIT COMMITTEES OF BSE LISTED COMPANIES

Abstract

The emergence of numerous financial controversies, followed by famous scandals, is one of the main elements in the emergence of the concept of corporate governance. Thus, the main objective of this article is to examine how to comply listed non-financial companies with the requirements of the Bucharest Stock Exchange (BSE), given their inability to set up audit committees. This approach requires a comparative analysis of Law 162/2017 with the guidelines of the Corporate Governance Code (CGC). The present research also contributes to the literature on the concept of corporate governance. The authors' expectations aim to confirm a high level of compliance with the requirements of the guidelines related to the setting up and operating of audit committees, but the confusion between the audit committee and the board of directors gives way to approaches that note a deviation from these recommendations. In this article the authors analysed the CGC compliance statements of companies listed on the BSE, for the standard and premium category, for the period between 2017-2020 on the basis of which an index of compliance with the recommendations relating to risk and internal control was compiled. Among the results we can see a low number of companies that have an audit committee, while only 26 from 66 companies have an audit committee with at least one independent non-executive member. Also, the results on the independence of the chairman (non-executive member) and relevant experience on the committee are even lower compared to the audit committee. However, the authors conclude a positive trend on the setting up and operating of the audit committee, even though most of the companies analysed do not have independent non-executive directors.

Keywords

• audit committee
• independence
• corporate governance
• bvb
• board of managers